Wet Seal Will Close All 171 Stores in Latest Retail Bloodbath
It looks like it’s the end of the line for one-time teen favorite store chain Wet Seal.
The mall-based retailer is planning to close all of its 173 or so stores after failing to turn its business around, according to several media reports. The company did not immediately return a request from Fortune for comment, but a worker adjustment and retraining notification (WARN) with the state of California last week said it was laying off 148 workers at its Irvine headquarters, saying “closure permanent.”
The Wall Street Journal obtained a letter dated January 20, sent to staff at headquarters, saying Wet Seal had been unable to find a buyer or get a cash injection, forcing it to close down. “Unfortunately, the company was unable to obtain the necessary capital or identify a strategic partner, and was recently informed that it will receive no further financing for its operations,” Vice President and General Counsel Michelle Stocker wrote in the letter the Wall Street Journal reviewed.
Wet Seal initially filed for bankruptcy two years ago, hurt as mall traffic weakened and teens turned to fast-fashion rivals such as H&M and Forever 21. The filing shortly after Wet Seal announced a plan to close 338 stores, or two-thirds of its fleet at the time, and lay off 3,695 employees. Versa Capital Management, a private-equity firm, later bought the company out of Chapter 11 bankruptcy protection for $7.5 million in cash, and at the time, promised to keep at least 140 stores open. But Wet Seal’s business never recovered.
The liquidation of Wet Seal comes on the heels of several bankruptcies of mall stalwarts in the last two years, including American Apparel, The Limited which this month closed all of its stores, as well as Aéropostale and Pacific Sunwear.